Correlation Between Shengtak New and Western Metal
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By analyzing existing cross correlation between Shengtak New Material and Western Metal Materials, you can compare the effects of market volatilities on Shengtak New and Western Metal and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shengtak New with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengtak New and Western Metal.
Diversification Opportunities for Shengtak New and Western Metal
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shengtak and Western is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Shengtak New Material and Western Metal Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Metal Materials and Shengtak New is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shengtak New Material are associated (or correlated) with Western Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Metal Materials has no effect on the direction of Shengtak New i.e., Shengtak New and Western Metal go up and down completely randomly.
Pair Corralation between Shengtak New and Western Metal
Assuming the 90 days trading horizon Shengtak New is expected to generate 1.14 times less return on investment than Western Metal. In addition to that, Shengtak New is 1.37 times more volatile than Western Metal Materials. It trades about 0.01 of its total potential returns per unit of risk. Western Metal Materials is currently generating about 0.02 per unit of volatility. If you would invest 1,624 in Western Metal Materials on November 17, 2024 and sell it today you would earn a total of 153.00 from holding Western Metal Materials or generate 9.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Shengtak New Material vs. Western Metal Materials
Performance |
Timeline |
Shengtak New Material |
Western Metal Materials |
Shengtak New and Western Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shengtak New and Western Metal
The main advantage of trading using opposite Shengtak New and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengtak New position performs unexpectedly, Western Metal can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Western Metal will offset losses from the drop in Western Metal's long position.Shengtak New vs. Linewell Software Co | ||
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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